Worcester Economy Grows 2.1 percent in Fourth Quarter, 2016 strongest year since before Great Recession
WORCESTER, MA (February 2, 2017) — According to the Worcester Economic Index (WEI), a quarterly economic analysis compiled by Assumption College Professor of Economics Thomas White, Ph.D., the Worcester economy grew 2.1 percent in the fourth quarter of 2016, which combined with solid growth turned in earlier in the year made 2016 the strongest year for the local economy since before the Great Recession.
The WEI is estimated using Bureau of Labor Statistics (BLS) data, all of which have improved over the past year. According to the BLS Current Population Survey of households, employment in the Worcester area has risen by about 2.3 percent since December 2015, while the BLS payroll survey found an employment growth rate of 1.6 percent. Most dramatically, the Worcester area unemployment rate fell from 4.8 percent in December 2015 all the way down to 3.0 percent in December 2016.
“Over the course of 2016 all three of the variables used to compute the WEI moved in a positive direction,” said Prof. White. “And compared to December 2015, the WEI finished the year up 3.0 percent, which marks the highest annual growth since before the Great Recession.”
While the forecast of the Worcester Economic Index is based on four national leading indicators, Prof. White said it is important to also examine data that is more locally-focused. The three local leading indicators which are followed for this project are: online help-wanted advertisements for the Worcester NECTA, new business incorporations also for the Worcester NECTA, and statewide initial unemployment claims.
“Currently, the three local leading indicators are offering mixed signals for the future direction of the economy,” said Prof. White. “Continuing its trend throughout 2016, online help-wanted advertisements fell substantially compared to a year ago and therefore this indicator is providing a negative signal at this time.”
Locally, online help-wanted advertisements fell 21 percent, compared to 9 percent on the national level since December 2015. New business incorporations in the greater Worcester area are providing a positive signal; compared to a year ago the number of incorporations is up about 9.4 percent. The final indicator—the number of initial unemployment claims in the Commonwealth—are up 1.5 percent since December 2015. According to Prof. White, although this is “technically a negative signal, the rise in claims is still quite small and is therefore offering only a weak signal at this time.”
“Over the next six months, the WEI is expected to grow at a rate of 1.3 to 1.7 percent,” said Prof. White. “Both national and local leading indicators are providing mixed signals concerning future economic activity.”
The next Worcester Economic Indicators report will be issued in May 2017. Additional information about this project is available here.
Kimberly Dunbar, Director of Public Affairs, Assumption College